What is net metering
Net metering allows residential energy consumers to get credit for the energy they produce on their property. Say a homeowner has installed solar panels on the roof of their home, yet does not use all of the energy that the solar panels produce every month. Net metering enables the homeowner to get credit for the excess energy from their energy provider.
The current rules
Currently, our net metering rules allow for a homeowner to utilize all of the power their solar panels generate and then receive credit at a wholesale rate or ‘avoided cost’ for any excess energy. The rules also include a grandfathering clause which locks in the rates, for the excess energy, for the life of the system. Meaning, if the homeowner installed solar panels with the understanding that they would receive a 1-for-1 kWh credit for each kWh excess their system produced, that 1-for-1 credit is locked in for the life of their solar panels.
The proposed change has the potential to eliminate net metering all together, opening the door for a ‘Buy all, Sell all’ market meaning that the homeowner would be forced to sell all of the energy his solar panels produce to his utility at avoided cost and then buy all of the energy his family uses at the standard retail rate. This would also apply to existing solar customers as the proposal only includes a grandfathering clause for five years. So even though the homeowner made an investment based on a certain understanding, the new rules are poised to turn the tables on him to where his investment may not ‘pencil out’.
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